In connection with the financing, Tom Simpson and Jonathan Marcus will join a reconstituted board of directors. Marcus is the CEO of Alimco and has over 30 years of experience as an investor, including numerous board roles. The Company will now focus exclusively on the growth and success of etailz.
The financing will help etailz achieve its growth goals, which includes further developing its software and services offerings, supporting inventory expansion, and expanding into new marketplaces and geographies. Mike had been Chief Executive Officer and a director of the Company since The Board thanks Mike for his contributions to the Company and wish him the best in the future. Chopra joined etailz in August following previous experiences at Microsoft, Groupon and Amazon.
Through the use of proprietary software and e-commerce insight, etailz identifies new distributors and wholesalers, isolates emerging product trends, and optimizes price positioning and inventory purchasing decisions. Peaches had given Trans World a license to use its trademark, but when the license expired in August , Trans World continued to use the trademark in three states. The charge put a dent in profits for , but Higgins said of the award: "We are happy to get this non-operating issue behind us so that we can turn our management focus back to In part because of the costs of its continued rapid expansion, the early s saw declining profits for Trans World.
These problems were reflected in the company's stock. Trans World had announced a plan in July to make a public offering of one million shares, , of which were owned by Higgins and , by the company. Part of the reason for the company's poor returns was the increasing competition from stores such as Best Buy Co. In music companies attempted to discourage stores from this practice by establishing the Minimum Advertised Pricing MAP policies, which threatened to withhold marketing allowances to retailers that sold their product below MAP prices.
But retailers seemed to ignore the MAP policies until it became apparent that their loss-leader practices were not helping their sales. Recognizing that the market was probably oversaturated with retail music and video stores and that something drastic had to be done to turn Trans World around, Higgins announced on February 2, , that Trans World would close stores.
The move was to eliminate poor-performing stores and concentrate on a core group of productive stores. Though Trans World closed outlets during the year more than the initially announced , sales declined only 3. For Your Entertainment store in Trumbull, Connecticut. Billed in company literature as "larger than life, bigger than anyone had imagined, with more store, more product, more of everything the customer wants," F.
Also important to the success of F. The influence of children was particularly strong in the sales of movie videos. For example, the Walt Disney Company's Beauty and the Beast was not only the best-selling video of but the best-selling video ever. In Aladdin, also by the Walt Disney Company, outperformed Beauty and the Beast, becoming the best-selling video ever. Following Aladdin as top sellers for were Pinocchio, Free Willy, and Homeward Bound, all movies with children as the targeted audience.
Recognizing this trend, Trans World Music made several moves in to take advantage of this huge source of sales. In their new F. Within the Saturday Matinee stores, a special section called Kids' Matinee was designed; called a "store within a store" by Trans World, Kids' Matinee offered similar merchandise as that found in their F.
In , when the Tandy Corporation was packaging its Incredible Universe electronic superstores, it turned to Trans World to supply the "soft" goods, such as compact discs and prerecorded videotapes, to accompany Tandy's electronic "hard" goods, such as compact discs and VCRs. Trans World agreed to supply the music and video products to the giant stores, some of which occupied nearly , square feet of retail space, of which 10, square feet on average was devoted to the music and video departments.
Trans World hoped that the joint venture with Incredible Universe would provide a broader customer base with a lower capital investment, thus lowering overhead and start-up costs and increasing profitability. Though initial response to the Incredible Universe stores had been positive, performance over a longer period was lackluster.
In , in an effort to increase plunging profits, Incredible Universe announced plans to promote Coconuts, Record Town, or F. But it was already too late. In late Tandy Corporation announced that all its Incredible Universe stores were to be closed or sold. Once Trans World began to see consistently positive results from its restructuring, Higgins began again to turn his sights toward growth and expanding market share.
Though Trans World was to close another 37 stores in , it was also planning to open 70 new stores, 40 of which would be relocations. Meanwhile, Higgins and John Sullivan, the chief financial officer, began to talk publicly about acquiring another company. A few companies that did not respond well to sluggish sales and market oversaturation in the s--especially those that had filed for bankruptcy--seemed ripe for takeover. We will only acquire profitable stores and save them [with] economies of distribution.
The closing of hundreds of stores across the industry also made it possible for Trans World to expand again without falling into the same trap it had in the early s. The company could rapidly pick up market share with relatively slow openings of new stores in strong sales areas and by making a few strategic acquisitions.
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